Fibonacci Progression Indicator

Notes:

These indicators and concepts are specifically designed for TradingView.com

Overview

Fibonacci progression with breaks is a technical trading indicator that is designed to identify potential reversal levels in a market. The indicator is based on the Fibonacci sequence, which is a mathematical sequence of numbers that follows a specific pattern. Fibonacci retracements are commonly used in trading, and Fibonacci progression with breaks by Lux Algo takes this concept one step further by incorporating price action analysis and market momentum into the calculation.

How to Trade

You can take a long when a B signal is printed then it will give you a series of numbers, 1-3. When each number is printed it represents a fibonacci level that has been broken. You can take profit at each level of 1-3 but make sure to exit at 3 if it prints.

There are some other potential trading strategies using the Fibonacci progression with breaks:

1. Breakout trades: Traders can enter long or short positions when the market breaks through a key Fibonacci level. This can be done with a stop loss order placed just below or above the level.
2. Trend reversal trades: Traders can use the indicator to identify potential trend reversals. When a reversal is confirmed, they can enter a long or short position with a stop loss order placed at the swing high or low.
3. Stop loss placement: Traders can use the indicator to determine where to place their stop loss orders. They can place the stop loss order just below or above the key Fibonacci level where the breakout or reversal occurred.

How to Calculate

Here is an overview of how the Fibonacci progression with breaks by Lux Algo works:

1. The indicator identifies swing highs and swing lows in the market.
2. Based on the swing high and swing low, the indicator calculates the Fibonacci retracement levels.
3. The indicator then looks for a break of a key Fibonacci level. This break is interpreted as a potential reversal signal.
4. If a break occurs, the indicator looks for confirmation of the reversal by analyzing the price action and market momentum.
5. Once a reversal is confirmed, the indicator generates a trading signal.

Here is how to calculate the Fibonacci progression with breaks by Lux Algo:

1. Identify the swing high and swing low in the market.
2. Calculate the Fibonacci retracement levels using the following formula:

Fibonacci Retracement Level = (Price Difference) x (Fibonacci Ratio) + Swing Low or High

Where:

• Price Difference = the difference between the swing high and swing low
• Fibonacci Ratio = a percentage value based on the Fibonacci sequence (e.g. 38.2%, 50%, 61.8%)
• Swing Low or High = the price level of the swing low or swing high

3. Look for a break of a key Fibonacci retracement level. This is typically the 50% or 61.8% level, but can vary based on the trader's preference.
4. Analyze the price action and market momentum to confirm the potential reversal.
5. Generate a trading signal once the reversal is confirmed.